Business entities, from local morn and pop shops to national retailers and large banks, require cash to service day-to-day business operations. For example, a grocery store clerk requires assorted denominations of paper currency or banknotes and coins in order to make change for customers purchasing goods with cash. If the clerk is unable to make the requisite change for a customer, the customer may be unable to otherwise purchase the item and the sale will be lost. The inability to service transactions with cash may also reflect poorly on a business's reputation. Customers who deal in cash may stop visiting such stores altogether. Bank branches and ATM's require cash to service the most basic customer requests. An inability to process these transactions, even for a short period of time, could adversely affect operations, not only of the locations themselves but also the operations of any associated institutions. On the other hand, carrying too much paper currency on hand may present a security risk for certain retail locations, such as convenience stores or other locations lacking in security infrastructure. Having too much cash on hand at one location could also result in too little cash at other locations where there is higher demand.
Although credit cards and electronic transactions have become more popular, a large percentage of transactions are still carried out with paper currency and coins. Thus, maintaining sufficient cash on hand at retail locations is a vital component of any business that sells virtually any type of goods or services. However, as electronic transactions increase in popularity, avenues for accumulation of currency to service day to day operations are diminishing.
Technology in the field of currency processing systems has yielded advancements in currency counting, counterfeit detection, and fitness calculation, enabling most businesses to obtain devices that automatically count, sort, and account for cash inventories. Particular devices may be capable of connecting to a network and providing output to a software system.
In certain currency processing systems, deposited banknotes are analyzed for integrity and quality. If the system determines that banknotes or other currency objects cannot be read properly, are damaged, counterfeit, or otherwise unfit for continued circulation, the system will generally reject the banknote or currency object for a human to perform a second review of the note. These systems may track deposited notes by serial number or other identifier, and store information regarding accepted and rejected notes in a database. Thus, certain cash management systems may have invoicing and tracking functionality for monitoring deposited banknotes. These systems may be implemented at various cash centers within a financial institution.
The cash cycle describes what happens to currency from printing to destruction. Currency is created and distributed by Central Banks (and similar authorities), enters circulation, is used and reused many times, and eventually reaches a point where it is worn or soiled and must be replaced with a new note. This also is true for other currency objects such as Food Coupons, Casino Vouchers, Cash-Out Tickets and other types of currency objects used in commerce.
Currency (also known as banknotes) is dispensed, carried, spent, stored, exchanged and transported. Currency is transported in bulk from places of excess buildup, such as retailers, to more secure locations, such as Cash in Transport (CIT) facilities, bank vaults, and the like. Whenever notes are aggregated, they must be sorted and counted. In virtually all places where any reasonable volume must be counted, this is done with machines of varying levels of speed and sophistication.
In the past several decades, the use of machines to count, sort and validate currency has expanded significantly in terms of both quantity and breadth of functionality. Some machines are used to count, sort, authenticate, capture serial numbers, evaluate fitness and even destroy banknotes (where this is authorized) at speeds up to or exceeding 44 banknotes per second. Output from these devices can be used to monitor currency deposits at various cash-points within a financial institution.